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From Riches to Rags Comments

Amy Tailor   |   March 18, 2008
Sanjiv Sidhu, a bearded modest man, was once the richest Indian in the world. He could have become the richest individual in the world had not he lost almost everything in one day.

Sidhu was born in June 1957 in Hyderabad, India. In 1980, he received his Bachelor of Science degree in Chemical Engineering from Osmania University in India. Shortly after his graduation, he moved to the United States and attended Oklahoma State University, earning a Master of Science degree in Chemical Engineering in 1982.

In 1982, he landed a job at Texas Instruments in Dallas, where he worked as an engineer in the artificial intelligence lab. Six years later, he left Texas Instruments to start Intellection in his apartment. He was joined by Ken Sharma, formerly of the Goldratt Institute, with whom he worked at Texas Instruments. They launched i2 Technologies, a Texas-based supply chain management software and services company. Their initial products became known as Factory Planner and Rhythm and turned into a huge success. Shortly after presentation, they became essential to Coca-Cola, BestBuy, Dell Computer, General Motors, Home Depot, Whirlpool, Caterpillar, Ford Motor Company, DaimlerChrysler, PepsiCo, Arcelor, Intel, NEC, Motorola and others.

i2 Technologies went public in 1996. In March 1999 its stock price reached $223.50 per share and its market capitalization amounted $26 billion. The company�s profits increased from $38.5 million in 1995 to more than $571 million in 1999.

Sidhu�s wealth grew like a weed. According to the Forbes, he owned $600 million in 1996. At the peak of his success, Sidhu�s personal stake in i2 reached $6.5 billion. At that point he was considered the richest person of Indian origin in the world. In 2000, Sidhu was awarded the Non-Resident Indian of the Year by the Indian government.
The higher you fly up, the greater is your fall. The trouble came when the tech bubble popped. Sidhu lost almost everything. Stock price fell by $134 per share and the company�s profits shrank by almost 50%. Fortunately, just before the crisis Sidhu sold $500 million worth of shares. His current stake in i2 equals to only $100 million.

The Non-Resident Indian managed to gather a great wealth, but its largest part went belly up mainly due to external problems. The story of Marvin Davis is quite different, however.

Marvin Davis joined his father Jack in the oil exploration business. The Davis Oil Company drilled for oil and gas in the Midwest since the 1940s and was incorporated in 1986 as Davis Petroleum. Mr. Davis earned himself a nickname �Mr. Wildcatter� because he would drill thousands of wells in unexplored areas in search of oil or natural gas.

Later in his life, he chased corporate deals in a similar fashion, making many highly publicized but unsuccessful bids to acquire companies like Northwest Airlines, United Airlines, CBS and Resorts International. In 2002, he led a group of investors who tried to buy out the American entertainment businesses of Vivendi Universal with an unsolicited bid for $20 billion but were rebuffed. Marvin was a big money maker but he also was a big money spender. He enjoyed lavish life spending millions on expensive homes, private planes, fancy décor and expensive baubles. In course of time, tens of billions turned into several miserable millions.

These stories illustrate that making billions is one thing, but saving and multiplying your fortune is another.
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